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On Tuesday, Baird analyst Joel Beatty upgraded argenx SE (NASDAQ: ARGX) stock rating from Neutral to Outperform while maintaining a price target of $680. The upgrade followed a recent decline in the company’s stock price, which has fallen 8.8% over the past week to $560.9, attributed to concerns over the impact of Medicare redesign on drug pricing. According to InvestingPro data, the stock currently maintains a strong Buy consensus among analysts, with targets ranging from $552 to $1,049.
Beatty’s analysis indicated that the market had not fully accounted for the reduced average revenue per patient for argenx’s drug Vyvgart, following the Medicare policy changes. Despite this, the analyst believes that Vyvgart is poised for long-term growth driven by volume, suggesting that the stock’s recent drop presents a more appealing investment opportunity. This view is supported by the company’s impressive 82% revenue growth over the last twelve months and strong financial health score of GREAT on InvestingPro.
The analyst’s comments underscored confidence in the drug’s market position, "It does seem to us that the lower average revenue per patient on Vyvgart was not fully priced into the market and will continue (and even accelerate). However, it appears to us that Vyvgart remains well-positioned for long-term volume-driven revenue growth." The company’s solid balance sheet, with more cash than debt, provides additional support for this growth trajectory.
The endorsement from Baird comes after argenx’s stock experienced a pullback late last week due to the aforementioned pricing concerns. Beatty’s outlook suggests a long-term growth trajectory for Vyvgart, which is expected to outweigh the initial pricing adjustments.
The maintained price target of $680 by Baird reflects a steady valuation despite the recent market fluctuations. Argenx (NASDAQ:ARGX) SE’s stock upgrade by Baird to Outperform is an indication of the firm’s belief in the company’s ability to navigate through the current pricing challenges and capitalize on future growth opportunities.
In other recent news, Argenx SE reported its first-quarter earnings, with Vyvgart generating net sales of $790 million, surpassing consensus estimates. This performance was highlighted by TD Cowen, which maintained a Buy rating and a $761 price target, emphasizing the company’s strong sales trajectory despite seasonal headwinds. Similarly, Leerink Partners maintained an Outperform rating with a $750 price target, acknowledging the robust launch of Vyvgart but noting investor concerns over revenue results and Medicare policy changes. Stifel analysts also reaffirmed a Buy rating and a $780 price target following the FDA’s approval of the Vyvgart Hytrulo pre-filled syringe, which simplifies self-administration and could boost patient uptake.
Deutsche Bank (ETR:DBKGn), however, revised its price target for Argenx to EUR525 from EUR575, maintaining a Hold rating. The bank’s analyst cited mixed first-quarter performance and the importance of Argenx’s commercial strategy in the immunoglobulin market. Despite these mixed views, analysts agree on the potential of Argenx’s pipeline, particularly in treating autoimmune conditions. The recent FDA approval of the Vyvgart Hytrulo syringe is seen as a significant development, enhancing Argenx’s product offerings in the myasthenia gravis and CIDP markets. As Argenx continues its commercial activities, analysts are keeping a close watch on its growth strategy and market performance.
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